Changes from report parliamentary committee draft to plenary report

Added(6a) Where information is not, or is no longer, sensitive from a commercial point of view, the Agency should be able to make its commercially non-sensitive trade database available for scientific purposes, subject to confidentiality requirements, with a view to contributing to enhanced market knowledge. This is intended to help to build confidence in the market and to foster the development of knowledge about the functioning of wholesale energy markets. The Agency should establish and make publicly available rules on how it will make the information available for scientific and transparency purposes in a fair and transparent manner.

RemovedRegulation (EU) No 1227/2011

Added(6b) A market participant, as defined in Article 2, point (7), Regulation (EU) No 1227/2011, should be understood to refer to any person, including a transmission system operator, a distribution system operator, a storage system operator and an LNG system operator, who enters into transactions in one or more wholesale energy markets. However, where a distribution system operator, storage system operator and LNG system operator does not enter into a transaction with regard to wholesale energy products, they should become exclusively subject to the relevant publication and disclosure obligations under Article 4 and Article 8(5) of Regulation (EU) No 1227/2011.

RemovedArticle 1 – paragraph 1 – point 1 – point a, Article 1 – paragraph 2: 2. This Regulation applies to trading in wholesale energy products. This Regulation is without prejudice to the application of Regulations (EU) 596/2014, (EU) 600/2014 and (EU) 648/2012 and Directive (EU) 2014/65 as regards activities involving financial instruments as defined in Article 4(1), point (15) of Directive (EU) 2014/65 as well as to the application of European competition law to the practices covered by this Regulation.

Added(6c) Market participants should provide the Agency with the data regarding the contracts for the supply of electricity or natural gas and the derivatives related to electricity and natural gas, which may result in an effective physical delivery in the Union.

RemovedAlignment - Reference to the Market Abuse Regulation (Reg 596/2014) is relevant and currently cited only in Recital 4, but missing from Article 1.

Added(7) Organised market places which carry out activities relating to the trading of wholesale energy products that are financial instruments under Article 4(1)(15) of Directive (EU) 2014/65 shall be duly authorized pursuant to the requirements of that Directive.

RemovedRegulation (EU) No 1227/2011

Added(8) The use of trading technology has evolved significantly in the past decade and is increasingly used on the wholesale energy markets. Many market participants use algorithmic trading and high-frequency algorithmic techniques with minimal or no human intervention. The risks arising from these practises should be addressed under Regulation (EU) No 1227/2011.

RemovedArticle 1 – paragraph 1 – point 1 – point b, Article 1 – paragraph 3 – subparagraph 2: The Agency, national regulatory authorities, ESMA and competent financial authorities of the Member States shall exchange relevant information and data regarding potential breaches of Regulation (EU) No 596/2014 involving wholesale energy products covered by this Regulation.

Added(9) Compliance with the reporting obligations under Regulation (EU) No 1227/2011 and the quality of the data that the Agency receives is of utmost importance to ensure effective monitoring and detection of potential breaches to achieve the objective of Regulation (EU) No 1227/2011. Inconsistencies in the quality, formatting, reliability and cost of trading data have a detrimental effect on transparency, consumer protection and market efficiency. It is essential that the information received by the Agency is accurate and complete for it to effectively carry out its tasks and functions. The Agency should in turn contribute to the establishment of a common Union energy data strategy.

RemovedDeletion of ‘in particular’ to improve clarity. Here it is needed that ACER, NRAs, ESMA and national competent financial authorities have mechanisms to make sure they always exchange information given the importance of providing the appropriate supervision without creating overlapping between roles and responsibilities that might be even detrimental to the overall objectives. We leave to the relevant authorities the definition of the best periodicity, taking into account that they have to respect the obligation to exchange information and data.

Added(10) To improve the Agency’s market monitoring and make data collection more complete, the current reporting regime needs improvement. The data collected should be expanded to overcome gaps in the data collection and include coupled markets, new balancing markets, contracts for balancing markets, explicitly and implicitly allocated transmission capacity, and products that have potential delivery in the Union. Organised market places should be required to provide the full order book data set to the Agency. ▌

RemovedRegulation (EU) No 1227/2011

Added(11) Inside Information Platforms (IIPs) should play an important role for the effective and timely publication of inside information. It should be mandatory for market participants to disclose inside information on dedicated IIPs to make the information easily accessible and enhance transparency. Market participants may, only in addition, continue to use other channels, including market participants' websites, to disclose the inside information, provided that equal conditions on timelines and accessibility are ensured. To ensure trust in the IIPs they should be authorised and registered, and the Agency’s supervisory powers over IIPs should be extended to include the power to impose fines and periodic penalty payments and to issue public notices. However, market participants should not be held responsible or liable with respect to the obligation to disclose inside information, in the case of temporary technical problems of duly registered and authorised IIPs or for any publication error caused by the IIP, provided that the information was transmitted to the IIP in time and using the requisite format.

RemovedArticle 1 – paragraph 1 – point 2 – point a, Article 2– paragraph 1 – point e: (e) information conveyed by a third party or by other persons acting on the market participants’ behalf and relating to the market participants’ pending orders in wholesale energy products, which is of a precise nature, relating directly or indirectly, to one or more wholesale energy products;

Added(12) To streamline and make the reporting of data to the Agency more effective, the information should be provided through Registered Reporting Mechanisms (RRMs) and the operation of RRMs should be authorised by the Agency. The RRMs should at all times comply with the conditions for authorisation and data protection law. The Agency should also establish a register of all RRMs in the Union. The Agency should have the power to withdraw such authorisation in certain cases. The Agency's supervisory powers over RRMs should be extended to include the power to impose fines and periodic penalty payments and to issue public notices.

RemovedThe paragraph comes from MAR, Article 7 (d), and was included in the Remit proposal, but we should be coherent and consistent with the proper Remit terminology, hence the use of "third party" and "market participants".

Added(13) In order to facilitate monitoring to detect potential trading based on inside information and data quality of collected information, the collection of inside information needs to be aligned with the current processes for trade data reporting.

RemovedRegulation (EU) No 1227/2011

Added(13a) The reporting obligations on market participants should be minimised by collecting the required information or parts thereof from existing sources where possible.

RemovedArticle 1 – paragraph 1 – point 2 – point b, Article 2 – paragraph 1 – point 1 – subparagraph 4a: For the purposes of the fourth subparagraph, the Commission shall be empowered to adopt delegated acts, in accordance with Article 20, to supplement this Regulation by establishing and updating, where necessary, a non-exhaustive list of relevant intermediate steps in a protracted process if, by itself, the information meets the criteria laid down in this Article.

Added(14) Persons professionally arranging and executing transactions have the obligation to report suspicious transactions in breach of the provisions on insider trading and market manipulation. To enhance the possibility of enforcement of such breaches, the persons professionally arranging transactions should also have the obligation to report suspicious orders and potential breaches of the obligation to publish inside information. Direct electronic access providers, where they are not providing arrangement services to third parties, and shared order-book providers should not be considered to be persons professionally arranging transactions.

RemovedThe proposal that Inside Information shall also cover events (intermediate steps) that occur in the context protracted processes is highly problematic and should be given more consideration as it creates uncertainty and complexity. Market participants needs more explanations and legal clarify and security what constitutes inside information in a protracted process. A simple-copy paste from MAR disregards the specifics of the energy markets and firms. An information should qualify as ‘inside information’ if ‘by itself, it satisfies the criteria of inside information’.

Added(15) Commission Regulation (EU) 2015/1222 establishing a guideline on capacity allocation and congestion management foresees the possibility of third country participation in the Union single day-ahead and intraday coupling in the electricity sector. Since the market coupling operator uses a specific algorithm to match bids and offers in an optimal manner, this may result in orders to trade being placed in a third country participating in the Union single day-ahead and intraday coupling but resulting in a contract for the supply of electricity with delivery in the Union. The placing of such orders to trade in third countries participating in the Union single day-ahead and intraday coupling that may result in delivery in the Union should be covered by the definition of wholesale energy product pursuant to this Regulation.

RemovedRegulation (EU) No 1227/2011

Added(16) In order to obtain an accurate, objective and reliable assessment of the price for LNG deliveries to the Union, the Agency should collect all the relevant LNG market data that are necessary to establish a daily LNG price assessment and benchmark. The price assessment and benchmark should be undertaken based on all transactions pertaining to relevant LNG deliveries into the Union. The Agency should be empowered to collect this market data from all participants active in LNG deliveries into the Union. All such participants should be obliged to report a record of their LNG market data to the Agency. Once established, the LNG price assessment and the ▌benchmark could also become a reference rate for derivatives contracts used for hedging the price of LNG or the difference in price between the LNG price and other gas prices. The Agency should minimise the burden imposed on LNG market participants by optimising the collection process of the relevant data through the existing sources and reporting mechanisms in place under Regulation (EU) No 1227/2011. Where the Agency finds that an LNG market participant has not submitted the required information, it should be able to impose fines or periodic penalty payments.

RemovedArticle 1 – paragraph 1 – point 2 – point b, Article 2 – paragraph 1 – point 1 – subparagraph 5: For the purposes of paragraph 1, information which, if it were made public, would be likely to significantly affect the prices of those wholesale energy products shall mean information a reasonable market participant would be likely to use as part of the basis of his or her decision(s) to enter into a transaction relating to, or to issue an order to trade in, a wholesale energy product.

Added(17) Delegation of tasks and responsibilities can be an effective instrument to reduce duplication of tasks, foster cooperation and reduce the burden imposed on market participants. Therefore a clear legal basis should be provided for such delegation. Where this does not entail an excessive administrative burden on market participants, national regulatory authorities should be able to delegate tasks and responsibilities to another national regulatory authority or to the Agency, with the delegates’ prior approval. Introducing specific conditions and limiting the scope for the delegation to what is necessary for the effective supervision of cross-border market participants or groups should be possible. Delegations should be governed by the principle of allocating competence to an authority which is best placed to take action on the subject matter.

RemovedThe terms “investor” and “investment decision” are specific MAR terms which do not fit in the context of REMIT. The proposal needs to be tailored to the terminology of REMIT. An “investor” becomes a “market participant” as soon as he enters into transactions relating to wholesale energy products.

Added(17a) To enhance the effectiveness of national regulatory authorities and restore public confidence in institutions, the rules on the performance of the duties of national regulatory authorities and the Agency have to ensure that conflicts of interest are avoided as far as possible, in particular in connection with the performance of certain duties.

RemovedRegulation (EU) No 1227/2011

Added(18) A uniform and stronger framework to prevent market manipulation and other breaches of Regulation (EU) No 1227/2011 in the Member States is necessary. Penalties for breaches of that Regulation should be proportionate, effective and dissuasive and reflect the type of the breaches, taking into account the ne bis in idem principle. At the same time, Member States are able, inter alia, to provide for effective, proportionate and dissuasive criminal penalties, considering that they are an effective tool in the financial sector. Administrative penalties, penalty payments and supervisory measures are complementary parts of an effective enforcement regime. A harmonised supervision of the wholesale energy market requires a consistent approach among national regulatory authorities, which should be provided with the appropriate financial, human and technical resources in order to adequately fulfil their tasks.

RemovedArticle 1 – paragraph 1 – point 2 – point b, Article 2 – paragraph 1 – point 1 – subparagraph 5 a (new): ACER shall, in close cooperation with national regulatory authorities, establish thresholds for the identification of events which, if they were made public, would likely to significantly affect the prices of the wholesale energy products;

Added(19) To date, the supervision and enforcement of activities under Regulation (EU) No 1227/2011 have been the responsibility of the Member States. Market abuse behaviours are increasingly cross-border in nature, often affecting several Member States. Enforcement action against cross-border market abuses can present jurisdictional challenges relating to the identification of the national regulatory authority that would be best placed to pursue the investigation in question.

RemovedRegulation (EU) No 1227/2011

Added(20) Market abuse cases involving multiple cross-border elements and market participants established outside the Union are also particularly challenging from an enforcement perspective. The current supervisory set-up is not appropriate for the desired level of market integration. The absence of a mechanism to ensure the best possible supervisory decisions for cross-border cases, where joint action by national regulatory authorities and the Agency currently requires complicated arrangements and where there is a patchwork of supervisory regimes must be addressed. There is ▌a need to set up an efficient and effective supervisory and investigatory regime for that type of market abuse cases, which cannot, due to its Union wide features, be addressed by Member State action alone, in particular where the national regulatory authorities are not already taking action.

RemovedArticle 1 – paragraph 1 – point 2 – point d, Article 2 – paragraph 1 – point c: (c) transmitting false information or providing false inputs in relation to a benchmark where the person who made the transmission or provided the input knew or ought to have known that it was false, or engaging in any other behaviour which intentionally leads to the manipulation of the calculation of a benchmark.

Added(21) The investigation of breaches of this Regulation with a cross-border dimension should be carried out through a uniform process at Union level. Complexity of cross-border cases and the need to ensure sufficient resources for such cases requires involvement of the Agency, in particular in more integrated energy market. Since the entry into force of Regulation (EU) No 1227/2011, the Agency has gained significant experience in monitoring and collecting relevant data on the wholesale energy markets in the Union to ensure their integrity and transparency. Building on this experience, the Agency should be empowered to carry out investigations to fight against the breaches of the provisions of Regulation (EU) No 1227/2011, including by appointing an independent investigating officer within the Agency with powers to conduct on-site inspections, request information and conduct interviews. The Agency should carry out such investigations in cooperation with the national regulatory authorities with the purpose of supporting and complementing their enforcement activities. Equally, in the context of an investigation by the Agency, where necessary, relevant national regulatory authorities should cooperate amongst each other in assisting the Agency.

RemovedRegulation (EU) No 1227/2011

Added(21a) To fulfil the new obligations assigned to it, in particular those relating to enhanced investigatory and sanctioning powers in cross-border cases, the Agency should have adequate staff and the ability to hire additional personnel, if necessary.

RemovedArticle 1 – paragraph 1 – point 2 – point f, Article 2 – paragraph 1 – point 4 – point a: (a) contracts for the supply of electricity or natural gas where delivery is in the Union;

Added(22) The Agency should be empowered to carry out investigations by conducting on-site inspections and by issuing requests for information to the persons under investigations, in particular where the suspected breaches of Regulation (EU) No 1227/2011 have a clear cross-border dimension. In undertaking the on-site inspections and in issuing requests for information to the persons under investigations, the Agency should closely and actively cooperate with the relevant national regulatory authorities, which in turn should provide the Agency with full assistance, including where a person refuses to be subject to the inspection or to provide the requested information. It is important that the procedural guarantees and fundamental rights of the persons ▌subject to the Agency’s investigations are fully respected. The confidentiality of the information submitted by the persons subject to the investigation should be safeguarded exchanged in accordance with applicable Union data protection rules.

RemovedThis concept is very vague and might lead to uncertainty and unintended consequences that should be considered in a more appropriate way.

Added(23) Since the objectives of this Regulation cannot be sufficiently achieved by the Member States, but can be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary to achieve that objective,

RemovedRegulation (EU) No 1227/2011

AddedHAS ADOPTED THIS REGULATION:

RemovedArticle 1 – paragraph 1 – point 2 – point f, Article 2 – paragraph 1 – point 4 – point a a (new): (aa) contracts and derivatives relating to the electricity and natural gas storages in the Union;

AddedAmendments to Regulation (EU) No 1227/2011

RemovedGiven that REMIT covers also storage operators as market participants, it is beneficial to add a third type of wholesale energy product for “storage” because COM proposal includes only two types of contracts which are related specifically to “supply” and “transportation”.

AddedRegulation (EU) No 1227/2011 is amended as follows:

RemovedRegulation (EU) No 1227/2011

Added(1) Article 1 is amended as follows:

RemovedArticle 1 – paragraph 1 – point 2 – point g, Article 2 – paragraph 1 – point 7: (7) ‘market participant’ means any person, including transmission system operators, distribution system operators, storage system operators and LNG system operators, who enters into transactions, including the placing of orders to trade, in one or more wholesale energy markets;

Added(a) Second paragraph is amended as follows:

RemovedThe proposed definitions for ‘market participant’, ‘person professionally arranging transactions’ and ‘organised market place’ are in parts overlapping. The extension to persons professionally arranging transactions when trading on their own account is superfluous as market participants trading on own account are already captured and PPATs should not be defined as market participants if they do not enter into transactions.

Added“2. This Regulation applies to trading in wholesale energy products. This Regulation is without prejudice to the application of Regulations (EU) 596/2014, (EU) 600/2014 and ▌ (EU) 648/2012 and Directive (EU) 2014/65 as regards activities involving financial instruments as defined in Article 4(1), point (15), of Directive (EU) 2014/65, as well as to the application of European competition law to the practices covered by this Regulation.”;

RemovedRegulation (EU) No 1227/2011

Added(b) In Article 1(3) the following second subparagraph is added:

RemovedArticle 1 – paragraph 1 – point 2 – point h, Article 2 – paragraph 1 – point 8a: (8a) 'person professionally arranging transactions' means a person professionally engaged in the reception and transmission of orders for, or in the arrangement of transactions in, wholesale energy products which are not financial instruments; direct electronic access providers are not considered to be persons professionally arranging transactions, when they are not providing arrangement services to third parties;